Claims adjusters need more training on structured settlements

According to MetLife’s 2022 Structured Settlement Survey, nearly 88 percent of settlement professionals are familiar with the benefits of structured settlement for personal injury clients, and 84 percent consider it a reasonable recommendation, especially when it comes to a minor. However, 58 percent say more structured settlement training is needed, either from structured annuity providers or structured settlement brokers/advisers.

In a structured settlement—a voluntary settlement between the indemnity claimant and the defendant, which is approved by the presiding judge, if necessary—the indemnity claimant does not receive compensation for the harm suffered in a lump sum. Rather, they receive a stream of tax-free payments—either for a specified period of time or for the rest of a person’s life—from the life insurance company.

“Settlement professionals understand the risk that applicants may spend funds too quickly and the role structured settlements play to ensure the money doesn’t run out when applicants need it most,” said Marie Hioki, Vice President and head of structured settlements at MetLife. “In fact, 76 percent of settlement professionals say they would most likely use structured settlement if they were personal injury claimants.”

Claims adjusters play an important role in structured settlement decisions

If an applicant takes a lump sum payment, they may not have the financial knowledge to ensure that the funds last for as long as they need them, potentially risking spending the money too quickly. This is of concern to claims adjusters: the survey showed that half of claims adjusters (49 percent) are concerned that a claimant will use up their personal injury compensation too quickly, regardless of the size of the claim.

As a result of these concerns, settlement specialists believe they are the most likely to introduce the idea of ​​structured settlement, with 44 percent of respondents reporting this. 24% believe that the idea is introduced by the lawyer, followed by the supervisory authorities or someone else, respectively, 12%, and 8% believe that the plaintiff’s lawyer plays this role.

The biggest obstacles to using a structured settlement are the preference for a lump sum and the lack of consent of the plaintiff’s attorney. According to the settlement professionals interviewed, current interest rates, sometimes cited as a reason for not structuring the settlement, have a minimal impact.

Brokers play an important role in demonstrating the value of structured settlement

Settlement professionals (90 percent) overwhelmingly believe that structured settlement brokers/advisers play an important role in determining the cost of a structured settlement and/or helping to calculate the cost of an injury claimant’s medical care, basic living expenses, and needs families.

Over half (58 percent) of claims adjusters would like additional training to expand their knowledge of structured settlement. They were evenly divided on whether they would prefer to provide structured settlement annuities (48%) or structured settlement brokers/advisers (48%).

A first step to meet this demand could be more outreach to the public. For brokers and advisors, there is an important opportunity to increase the frequency of contact with settlement specialists. According to the survey, only 22% of settlement specialists contact a structured settlement broker/adviser once a month or more, 38% receive messages from brokers less than once a month, and 40% of settlement specialists say they have never received a call or didn’t email. from a structured settlement broker/adviser.

“Settlement professionals look to brokers, consultants and insurance companies for their knowledge and experience to help them better understand structured settlements and identify claims that can be structured,” Hioki said. “This knowledge and experience can enable them to successfully position structured settlement solutions with their clients and ensure that the revenue generated from personal injury claimants is not depleted too quickly.”

About the study

The 2022 MetLife Structured Settlement Survey was conducted from April 21 to June 13. MetLife has commissioned MMR Research Associates, Inc. conduct a telephone survey of specialists in insurance cases. Responses to the survey were received from 50 claims adjusters, claims adjusters, directors/VPs of claims adjusters and other claims adjusters, most of whom are intimately familiar with structured settlement.

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